Homeowners who participate in the Household Finance Agency’s program for distressed homeowners may use a safe harbor for figuring their annual itemized deduction related to their homes. More specifically, distressed homeowners participating in a Treasury-approved program listed at www.treasury.gov/HHF can deduct the lesser of:
This safe harbor, which had been scheduled to expire at the end of 2017, has been extended by the IRS to run through 2021 (Notice 2017-40, 2017-32 IRB 190).
State HFAs may, but are not required to, use Form 1098-MA, Mortgage Assistance Payments, to report state HFA mortgage assistance and homeowner payments made to mortgage servicers under a state program.
Caution: Mortgage insurance premiums paid in 2017, even if included in an information return, may not be deducted unless Congress extends the law which expired at the end of 2017.